TOOLBOX TALK - (WEEKLY SPOTLIGHT)

HSE – TBT – 25– THE COSTS OF ACCIDENTS, INCIDENTS AND ILL HEALTH
Version: 1 Author: Weston Musonda Approved: Daniel Chisanga Period: week 25
1. Introduction
All accidents, incidents and occupational ill health represent varying degrees of loss to an organization. This loss is in form of
unplanned costs classified into direct and indirect costs. While many of us may complain about ‘the burden of health and
safety’, what we may fail to realize is that these direct and indirect costs that arise far surpasses the burden of health and
safety. Any accident or incidence of ill-health unfortunately result in both direct and indirect costs.
2. Direct costs 3. Indirect Costs
These are costs which are “uninsured” and come right out of the
These are costs which are directly related to the accident. These
company finances and they can drive the company into “red” as
include the following:
they are 2 to 10 more than direct costs. They are unforeseen
 treatment costs – the cost of first aid treatment, transport to hospital, expenses that arise indirectly from the result of an incident or
charges made by accident and emergency departments of accident.
hospitals.
 lost time costs – of the injured person, management, first
 claims on employers and public liability insurance. aid staff and others who should have been doing what they
 damage to buildings, equipment or vehicles. normally do.
 any attributable production and/or general business loss.  production costs – the extra production costs as a result of
lost production following an accident.
 the absence of employees.  staff costs – through payment of overtime rates following
 fines resulting from prosecution by the courts. the stoppage in production sometimes following an
 sick pay. accident.
 training and supervision costs – as a result of the need to
 some damage to product, equipment, vehicles or process not
provide additional training and increased supervision.
directly attributable to the accident (e.g. .caused by replacement
 miscellaneous costs – such as the replacement of personal
staff);
items belonging to the injured person and others, e.g.,
 increases in insurance premiums resulting from the accident. spectacles, personal clothing and footwear.
 any compensation not covered by the insurance policy due to an
excess agreed between the employer and the insurance In addition to the indirect costs outlined above, there are
company. further indirect costs of accidents and ill health. These may
 legal representation following any compensation claim. include:
 reduced output and performance due to reduced morale
following, particularly, a fatal accident to a member of the
workforce.
 reduced sales and business as a result of adverse media
publicity.
 trade union activity or reaction; and
 increased attention from the courts.

4. The “Social” Costs

These are costs incurred by the victim and /or family and cannot
easily be replaced or adequately compensated such as
 Loss of a loved one or breadwinner
 cost of pain and suffering
 Cost of taking care of the victim.
 loss of or reduced earning capacity due to mental and/or
physical injury such as loss of limbs, sight etc.
5. Conclusion  Stigma associated with the injury
As can be seen from the lists above, incidents costs can be significant and canlegal
be detrimental to the company.
costs in pursuing A series
a claim (which mayofbeincidents
awardedand
by a
Bin of fish which dropped at the harbor. Yalelo lost 360kgs
illnesses can easily lead to collapse of the company as these costs are not budgeted for. So, the
it is employer).
more viable to budget for the “burden of
(approx.K20,000) of fish into the lake. judge against
health and safety” i.e., implementing a health and safety management system which involves doing proactive activities to prevent
incidents and ill-health in the workplace.